It appears the economic downturn that the nation and the world has been battling has claimed its first casualty on the East End.
On Monday, November 24, the organizing group of Georgica Bank announced it has withdrawn its application for a national charter.
“On behalf of the management team, Leonard Ackerman our chairman, and the entire organizer group, we want to thank the local community for the support we received during our capital raise, as more than 260 investors subscribed to our stock offering,” said Christopher Becker, an Amagansett native and president and CEO of Georgica Bank in a press release. “We decided to withdraw our application based on the probability that we would not reach our minimum $25 million in capital during the allotted time frame which ends on December 3.”
“Our business plan was strong and supported by the banking regulators,” said Ackerman. “Unfortunately our efforts to raise capital coincided with one of the most turbulent times in our country’s financial history.Â While interest in our stock was active right up until the decision to withdraw, the economic difficulties resulted in stalled funding. The management team will immediately begin the process of returning investor subscriptions in full.”Â Â
After two years of legwork, in the summer of 2007, Becker, Ackerman and an organizing group announced the bank’s imminent creation, after it filed a formal application with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation. The proposal called for the creation of Georgica Bank, with a principal office on Montauk Highway in Bridgehampton and a branch planned at Ackerman’s law firm on Pantigo Road in East Hampton. Initially, the group had hoped the bank would be up and running, having raised a needed $25 million in capital, by the fall of 2008.
While the bank intended on serving the whole of the East End community, its concept revolved around a focus on businesses, municipalities and not-for-profit organizations. The team behind Georgica Bank was a largely local group of banking professionals including Becker, Sag Harbor resident, executive vice president and chief financial officer Janet Verneuille, and Sandra Novick, of Southold, who was to serve as senior vice president and chief retail banking officer, overseeing marketing. Becker, Verneuille and Novick are all former employees of the Bridgehampton National Bank.
On Tuesday, Becker said it was the economic climate and the state of the capital markets that have brought the bank’s creation to a halt, as the concept was widely appreciated in the community and banking world as one that would likely be successful.
“Our immediate plan is to wrap up the operation, get our subscribers back their money and go on with our professional careers,” said Becker. “The vision was a great one, and we will see what will come down the road. We have had a lot of subscribers, who we have been in touch with, calling us, telling us to keep their names on a list if things change. We have been very happy with the support we have had for the project. I am confident, if it wasn’t for the economy, we would have completed it, but there is nothing you can do to control that market. We started this over two years ago, and you just can’t count on the timing, or whether it will be a good environment or not.”